[Congressional Record Volume 167, Number 88 (Thursday, May 20, 2021)]
[Senate]
[Pages S3221-S3223]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 1755. Mr. RUBIO submitted an amendment intended to be proposed to
amendment SA 1502 proposed by Mr. Schumer to the bill S. 1260, to
establish a new Directorate for Technology and Innovation in the
National Science Foundation, to establish a regional technology hub
program, to require a strategy and report on economic security,
science, research, innovation, manufacturing, and job creation, to
establish a critical supply chain resiliency program, and for other
purposes; which was ordered to lie on the table; as follows:
At the end of division F, insert the following:
TITLE IV--MEDICAL MANUFACTURING ECONOMIC DEVELOPMENT
SEC. 6401. SHORT TITLE.
This title may be cited as the ``Medical Manufacturing,
Economic Development, and Sustainability Act of 2021'' or the
``MMEDS Act of 2021''.
SEC. 6402. ECONOMICALLY DISTRESSED ZONES.
(a) In General.--Chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
subchapter:
``Subchapter AA--Medical Product Manufacturing in Economically
Distressed Zones
``subchapter aa--medical product manufacturing in economically
distressed zones
``Sec. 1400AA-1. Medical product manufacturing in economically
distressed zone credit.
``Sec. 1400AA-2. Credit for economically distressed zone products and
services acquired by domestic medical product
manufacturers.
[[Page S3222]]
``Sec. 1400AA-3. Special rules to secure the national supply chain.
``Sec. 1400AA-4. Designation of economically distressed zones.
``SEC. 1400AA-1. MEDICAL PRODUCT MANUFACTURING IN
ECONOMICALLY DISTRESSED ZONE CREDIT.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by subtitle A for the taxable
year an amount equal to 40 percent of the sum of--
``(1) the aggregate amount of the taxpayer's medical
product manufacturing economically distressed zone wages for
such taxable year,
``(2) the allocable employee fringe benefit expenses of the
taxpayer for such taxable year, and
``(3) the depreciation and amortization allowances of the
taxpayer for the taxable year with respect to qualified
medical product manufacturing facility property.
``(b) Denial of Double Benefit.--Any wages or other
expenses taken into account in determining the credit under
this section may not be taken into account in determining the
credit under sections 41, and any other provision determined
by the Secretary to be substantially similar.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Economically distressed zone wages.--
``(A) In general.--The term `economically distressed zone
wages' means amounts paid or incurred for wages during the
taxable year which are--
``(i) in connection with the active conduct of a trade or
business of the taxpayer, and
``(ii) paid or incurred for an employee the principal place
of employment of whom is in a qualified medical product
manufacturing facility of such taxpayer.
``(B) Limitation on amount of wages taken into account.--
``(i) In general.--The amount of wages which may be taken
into account under subparagraph (A) with respect to any
employee for any taxable year shall not exceed the
contribution and benefit base determined under section 230 of
the Social Security Act for the calendar year in which such
taxable year begins.
``(ii) Treatment of part-time employees, etc.--If--
``(I) any employee is not employed by the taxpayer on a
substantially full-time basis at all times during the taxable
year, or
``(II) the principal place of employment of any employee is
not within an economically distressed zone at all times
during the taxable year,
the limitation applicable under clause (i) with respect to
such employee shall be the appropriate portion (as determined
by the Secretary) of the limitation which would otherwise be
in effect under clause (i).
``(C) Treatment of certain employees.--The term
`economically distressed zone wages' shall not include any
wages paid to employees who are assigned by the employer to
perform services for another person, unless the principal
trade or business of the employer is to make employees
available for temporary periods to other persons in return
for compensation.
``(D) Wages.--For purposes of this paragraph, the term
`wages' shall not include any amounts which are allocable
employee fringe benefit expenses.
``(2) Allocable employee fringe benefit expenses.--
``(A) In general.--The term `allocable employee fringe
benefit expenses' means the aggregate amount allowable as a
deduction under this chapter to the taxpayer for the taxable
year for the following amounts which are allocable to
employment in a qualified medical product manufacturing
facility:
``(i) Employer contributions under a stock bonus, pension,
profit-sharing, or annuity plan.
``(ii) Employer-provided coverage under any accident or
health plan for employees.
``(iii) The cost of life or disability insurance provided
to employees.
``(B) Allocation.--For purposes of subparagraph (A), an
amount shall be treated as allocable to a qualified medical
product manufacturing facility only if such amount is with
respect to employment of an individual for services provided,
and the principal place of employment of whom is, in such
facility.
``(3) Qualified medical product manufacturing facility.--
The term `qualified medical product manufacturing facility'
means any facility that--
``(A) researches and develops or produces medical products
or essential components of medical products, and
``(B) is located within an economically distressed zone.
``(4) Qualified medical product manufacturing facility
property.--The term `qualified medical product manufacturing
facility property' means any property originally used in (or
consisting of) a qualified medical product manufacturing
facility if such property is directly connected to the
research, development, or production of a medical product.
``(5) Medical product; essential component.--
``(A) Medical product.--The term `medical product' means--
``(i) a drug that--
``(I) is a prescription drug subject to regulation under
section 505 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355) or section 351 of the Public Health Service Act
(42 U.S.C. 262);
``(II) is subject to regulation under section 802 of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 382); or
``(III) is described in section 201(jj) of such Act (21
U.S.C. 321(jj)); or
``(ii) a device, as defined in section 201(h) of such Act
(21 U.S.C. 321(h)).
``(B) Essential component.--The term `essential component'
means, with respect to a medical product--
``(i) an active pharmaceutical ingredient; or
``(ii) a protein, antibody, enzyme, hormone, or other
organic material that is an active ingredient in a biological
product.
``(6) Aggregation rules.--
``(A) In general.--For purposes of this section, members of
an affiliated group shall be treated as a single taxpayer.
``(B) Affiliated group.--The term `affiliated group' means
an affiliated group (as defined in section 1504(a),
determined without regard to section 1504(b)(3)) one or more
members of which are engaged in the active conduct of a trade
or business within an economically distressed zone.
``SEC. 1400AA-2. CREDIT FOR ECONOMICALLY DISTRESSED ZONE
PRODUCTS AND SERVICES ACQUIRED BY DOMESTIC
MEDICAL PRODUCT MANUFACTURERS.
``(a) Allowance of Credit.--In the case of an eligible
medical product manufacturer, there shall be allowed as a
credit against the tax imposed by subtitle A for the taxable
year an amount equal to the applicable percentage of the
aggregate amounts paid or incurred by the taxpayer during
such taxable year for qualified products or services.
``(b) Applicable Percentage.--For purposes of this section,
the term applicable percentage means--
``(1) 30 percent in the case of amounts paid or incurred to
persons not described in paragraph (2) or (3), and
``(2) 5 percent in the case of amounts paid or incurred to
a related person.
``(c) Eligible Medical Product Manufacturer.--For purposes
of this section, the term `eligible medical product
manufacturer' means any person in the trade or business of
producing medical products in the United States.
``(d) Qualified Product or Service.--For purposes of this
section, the term `qualified product or service' means--
``(1) any product which is produced in an economically
distressed zone and which is integrated into a medical
product produced by the taxpayer, and
``(2) any service which is provided in an economically
distressed zone and which is necessary to the production of a
medical product by the taxpayer (including packaging).
``(e) Related Persons.--For purposes of this section,
persons shall be treated as related to each other if such
persons would be treated as a single employer under the
regulations prescribed under section 52(b).
``(f) Other Terms.--Terms used in this section which are
also used in section 1400AA-1 shall have the same meaning as
when used in such section.
``SEC. 1400AA-3. SPECIAL RULES TO SECURE THE NATIONAL SUPPLY
CHAIN.
``(a) In General.--In the case of a qualified repatriated
pharmaceutical manufacturing facility, section 1400AA-1(a)
shall be applied by substituting `60 percent' for `40
percent'.
``(b) Election To Expense in Lieu of Tax Credit for
Depreciation.--In the case of a taxpayer which elects (at
such time and in such manner as the Secretary may provide)
the application of this subsection with respect to any
qualified repatriated medical product manufacturing facility
or qualified population health product manufacturing
facility--
``(1) section 1400AA-1(a)(3) shall not apply with respect
to any qualified medical product manufacturing facility
property with respect to such facility, and
``(2) for purposes of section 168(k)--
``(A) such property shall be treated as qualified property,
and
``(B) the applicable percentage with respect to such
property shall be 100 percent.
``(c) Qualified Repatriated Medical Product Manufacturing
Facility.--For purposes of this section, the term `qualified
repatriated medical product manufacturing facility' means any
qualified medical product manufacturing facility (as defined
in section 1400AA-1) the production of which was moved to an
economically distressed zone from a foreign country that the
United States Trade Representative has determined could pose
a risk to the national supply chain because of political or
social factors.
``SEC. 1400AA-4. DESIGNATION OF ECONOMICALLY DISTRESSED
ZONES.
``(a) In General.--For purposes of this subchapter, the
term `economically distressed zone' means any population
census tract within the United States which--
``(1) has a poverty rate of not less than 35 percent for
each of the 5 most recent calendar years for which
information is available, or
``(2) satisfies each of the following requirements:
``(A) The census tract has pervasive poverty, unemployment,
low labor force participation, and general distress measured
as a prolonged period of economic decline measured by real
gross national product.
``(B) The census tract has a poverty rate of not less than
30 percent for each of the 5
[[Page S3223]]
most recent calendar years for which information is
available.
``(C) The census tract has been designated as such by the
Secretary and the Secretary of Commerce pursuant to an
application under subsection (b).
``(b) Application for Designation.--
``(1) In general.--An application for designation as an
economically distressed zone may be filed by a State or local
government in which the population census tract to which the
application applies is located.
``(2) Requirements.--Such application shall include a
strategic plan for accomplishing the purposes of this
subchapter, which--
``(A) describes the coordinated economic, human, community,
and physical development plan and related activities proposed
for the nominated area,
``(B) describes the process by which the affected community
is a full partner in the process of developing and
implementing the plan and the extent to which local
institutions and organizations have contributed to the
planning process,
``(C) identifies the amount of State, local, and private
resources that will be available in the nominated area and
the private/public partnerships to be used, which may include
participation by, and cooperation with, universities, medical
centers, and other private and public entities,
``(D) identifies the funding requested under any Federal
program in support of the proposed economic, human,
community, and physical development and related activities,
``(E) identifies baselines, methods, and benchmarks for
measuring the success of carrying out the strategic plan,
including the extent to which poor persons and families will
be empowered to become economically self-sufficient, and
``(F) does not include any action to assist any
establishment in relocating from one area outside the
nominated area to the nominated area, except that assistance
for the expansion of an existing business entity through the
establishment of a new branch, affiliate, or subsidiary is
permitted if--
``(i) the establishment of the new branch, affiliate, or
subsidiary will not result in a decrease in employment in the
area of original location or in any other area where the
existing business entity conducts business operations,
``(ii) there is no reason to believe that the new branch,
affiliate, or subsidiary is being established with the
intention of closing down the operations of the existing
business entity in the area of its original location or in
any other area where the existing business entity conducts
business operation, and
``(iii) includes such other information as may be required
by the Secretary and the Secretary of Commerce.
``(c) Period for Which Designations Are in Effect.--
Designation as an economically distressed zone may be made at
any time during the 10-year period beginning on the date of
the enactment of this section, and shall remain in effect
with respect to such zone during the 15-year period beginning
on the date of such designation. Economically distressed
zones described in subsection (a)(1) shall take effect on the
date of the enactment of this Act and shall remain in effect
during the 15-year period beginning on such date.
``(d) Territories and Possessions.--The term `United
States' includes the 50 States, the District of Columbia, and
the territories and possessions of the United States.
``(e) Regulations.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this section,
including--
``(1) not later than 30 days after the date of the
enactment of this section, a list of the population census
tracts described in subsection (a)(1), and
``(2) not later than 60 days after the date of the
enactment of this section, regulations or other guidance
regarding the designation of population census tracts
described in subsection (a)(2).''.
(b) Clerical Amendment.--The table of subchapters for
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new item:
``subchapter aa--medical product manufacturing in economically
distressed zones''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2020.
SEC. 6403. REPORT ON NEED FOR INCENTIVIZING DEVELOPMENT OF
THERAPIES.
Not later than 90 days after the date of enactment of this
Act, the Secretary of Health and Human Services shall examine
and report to the Congress on--
(1) the extent to which the health of aging individuals in
the United States, African Americans, Hispanics, Native
Americans, veterans, or other vulnerable populations in the
United States has been disproportionately harmed by the
COVID-19 pandemic and prior epidemics and pandemics;
(2) the therapies currently available, and whether there is
a need for additional innovation and development to produce
therapies, to reduce the exposure of vulnerable populations
in the United States to risk of disproportionate harm in
epidemics and pandemics; and
(3) whether the Secretary recommends providing the same
incentives for the development and marketing of therapies
described in paragraph (2) as is provided under the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) with
respect to qualified infectious disease products designated
under section 505E(d) of such Act (21 U.S.C. 355f(d)).
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